By Irma Isip and R. Castro
About 60 to 70 percent of members of the Philippine Chamber of Commerce and Industry (PCCI) have expressed willingness to restart their businesses but the group’s president sees the need for banks to step in and aid these companies.
Benedicto Yujuico said he made this assessment based on his conversations with national area vice presidents in consultations with their local chapters.
“They are willing to try to restart their business. Others have a wait and see attitude or have given up already,” Yujuico said.
At the Pinas Muna press event over the weekend, Yujuico reiterated his call for banks and financial institutions to support micro, small and medium enterprises (MSMEs) to extend their loan maturities so they can use their money as working capital and as salaries to their workers.
Yujuico commended Bangko Sentral ng Pilipinas governor Benjamin Diokno for responding quickly on the needs of business as the central bank now allows classification of loans to SMEs as part of reserves.
“This means banks can rediscount loans to SMEs,” Yujuico said, as he expressed this measure will benefit enterprises.
Yujuico urged the BSP to incentivize lenders which will defer or restructure loans principal repayments for individual and corporate borrowers heavily burdened by the effects of the prolonged community quarantine.
Rather than making loan deferments or restructuring prescriptive and mandatory, Yujuico called on the BSP to consider the grant of regulatory relief measures such as the relaxation of rules on loan loss provisioning and staggered booking of loan loss provisions as proposed in House Bill No. 6815, the Accelerated Recovery and Investments Stimulus for the Economy (ARISE) bill.
PCCI backs the inclusion in the ARISE a provision that extends loan terms for a period of one to two years.
“We are calling on the banks to review their guidelines with a request to align with the ARISE to allow longer payment extensions so that they can respond appropriately to the big negative impact of the pandemic on many borrowers,” Yujuico said.
Meanwhile, the Securities and Exchange Commission (SEC) has reiterated its call on lending companies, financing companies and microfinance non-government organizations (NGOs) to “implement debt relief measures such as lowering of interest rates, waiver or reduction of penalties, charges and other fees, payment holiday, debt consolidation, extension of loan terms, and provision of flexible payment schedules provide relief to their borrowers while the economy gradually reopens.
In a notice dated June 11, the Commission said lenders may develop and implement their own programs or schemes that will provide relief to their borrowers, in addition to the mandatory grace period required under the Bayanihan to Heal As One Act which sets a minimum 30-day grace period for the payment of all loans falling due within the enhanced community quarantine period at no interest, fees and other charges to future payments or amortizations. Borrowers were likewise given the option to pay the interest accrued during the grace period on a staggered basis over the remaining life of the loan.